National Audit Office report. What did it really say?

23 March 2018

On 22 February the National Audit Office (‘NAO’) released its report[1] on the Department of Education’s current system for converting maintained schools to academies. The report should help schools either considering or going through the conversion process to identify areas on which the Department may concentrate in the future, and provides academy trusts with an insight into the views of the NAO on the academy programme.

The NAO describes the Department’s initial approach to conversion as focussed on quantity rather than quality, noting that only 0.6% of applications to convert to academies without a sponsor between September 2014 and August 2017 were rejected. The authors go on to report that there is now more scrutiny of applicants’ financial health and that the Department has strengthened the standards of governance it expects from academy trusts.

The report notes that the ‘Department does not carry out its own checks to ensure that all academy trustees and senior leaders are fit and proper persons’. The Department currently makes these checks for only a small sample of schools converting without a sponsor. In light of the NAO’s report, this could change in future. Prospective converters and trusts should therefore be aware of and prepared for these due diligence tests and greater scrutiny.

The NAO reports that sponsors and schools have not always been aware of what is required of them. For example, multi-academy trusts (‘MATs’) and schools have responsibility for identifying and assessing financial risks, but do so with little guidance from Department. The authors also observe that schools do not always understand how governance and accountability change following conversion.

The availability and capacity of academy sponsors was one of the report’s major concerns. The NAO warns that the Department may struggle to find enough suitable sponsors for academies in the coming years. Many of the schools which have yet to convert are primaries, often smaller and more remote, and therefore more difficult to incorporate into MATs.

The difficulties faced by the most challenged schools make them less attractive to potential sponsors. These are the schools most in need of effective sponsors, and the longer they are without such leadership, the greater their challenges become.

The NAO notes that the Department now only approves single-academy trusts in ‘exceptional circumstances.’ However, some single-academy trusts, which were set up with only one school on the condition that further schools would be added later, are still to do so more than three years later. As a result of the NAO’s concerns, it may be that in the future the Department puts more pressure on sponsors.

Finally, the authors echo Ofsted’s concern about how long it is taking to convert inadequate schools, finding that two-thirds are taking more than the aimed-for nine months to open as academies. This is a particular problem given that the Department’s ‘main intervention for underperforming maintained schools is to direct them to become academies’. In light of the report, schools could in future come under more pressure from the Department to convert more quickly.